Citizens Financial Services, Inc. (Nasdaq: CZFS), the parent company of First Citizens Community Bank, released its unaudited consolidated financial results for the three and nine months ended September 30, 2026. The company reported net income of $11.9 million for the third quarter of 2026, an increase of $1.9 million compared to the same period in 2025. For the first nine months of 2026, net income totaled $32.5 million, representing a $6.4 million increase over the same period in 2025.
The increase in earnings was primarily driven by a rise in net interest income. Net interest income before the provision for credit losses was $27.3 million for the third quarter of 2026, an increase of $2.1 million, or 8.4%, compared to the prior year. For the nine-month period, this figure totaled $79.1 million, an increase of $7.3 million, or 10.1%. The company attributes this growth to organic growth in loan and investment interest income.
Return on average equity for the third quarter of 2026 was 13.39%, compared to 12.52% in the prior year. Return on average assets for the same period was 1.45%. The company recorded no provision for credit losses in the third quarter of 2026, compared to $500,000 in the prior year. For the nine months ended September 30, 2026, the provision for credit losses was $1.0 million, a decrease of $875,000 from the same period in 2025.
On the balance sheet, total assets stood at $3.41 billion as of September 30, 2026. Net loans increased by $115.4 million since December 31, 2025, reaching $2.36 billion. This growth was driven by increases in commercial real estate loans and agricultural real estate loans. The loan-to-deposit ratio was 95.15% as of September 30, 2026.
Non-performing assets increased to $51.5 million as of September 30, 2026, compared to $23.2 million at December 31, 2025. The increase is primarily attributed to ten commercial real estate loan relationships and one construction real estate loan relationship totaling approximately $21.4 million being placed on non-accrual status during the first nine months of 2026 due to becoming more than 90 days past due. Despite the increase in non-performing assets, specific reserves for these assets remained relatively stable at $2.1 million as of September 30, 2026.
